What is Industrial sales?

B2 B Marketing

Institutional sales

Government

Salient Features

• Fewer buyers• Large buyers• Closer customer -

supplier relationship• Geographical

concentration of buyers• Derived demand• Inelastic demand

• Fluctuating demand• Professional purchasing• Several buying

influences• Multiple sales calls• Direct purchasing• Reciprocity• Leasing

Buying Situations

• Routine items

• new specifications

• new items

Systems Buying

Buying a total solution from one seller

Systems Contracting

Single supply source supplies

MRO (maintenance,repair.operators)

Buying Centres

• Initiators• Users• Influencers• Deciders

• Approvers• Buyers• Gatekeepers

Major Influencers

• Environmental

• Organisational

• Interpersonal

• Individual

• Cultural

Environmental

• Macro views eg.production levels,investment,consumer spending,interest rates,technological changes,political - regulatory,eco - friendly developments

• You may like to store up raw materials fearing an impending scarcity or you may like to sign up some long term agreements

Organisational• Purchase department• Cross - functional roles - team operation

• Centralised purchasing - economical,better deals,easy for supplies to interact at one point

• Decentralisation of low price items• Internet purchasing• Long term contracts• Supplier evaluation• JIT

Interpersonal

• The seller has to be sensitive to the group dynamics existing in the organization involved in the buying process. To that extent any prior information researched before the purchase decision is taken is invaluable for the selling organization.

Individual

• ‘keep it simple’

• own expert

• want the best

• want everything done

• ‘negotiators’

Cultural Factors

Necessary to know the local culture.

Business buyers buy to reduce operating costs or satisfy social or

legal obligations

Buyer tactics

• Commoditization

• Multisourcing

Procurement Orientation

• Cost reductions

• Quality improvements

• Early supplier involvement programmes

Buying Process

• Problem recognition - new product,spares,purchase material unsatisfactory,opportunities to buy some materials economically

• General need description - evolved in a team process

• Product specifications - engineering,manufacturing.technical

• Supplier search

• Proposal solicitation - quotations,proposals,presentations

• Supplier selection• Buying situation - routine order products,procedural

problem products,political problem products

Routine order products

• delivery

• price

• reliability

• supplier reputation

Procedural problem products

• Technical service

• supplier flexibility

• product reliability

Political problem products

• All the previous points mentioned in the previous two slides

Multisourcing

• Hedging against risks of non - supply

• supplier can have IR problems

• machine breakdowns

• insurance against ‘twisting arms’

Institutional Buyers

• Business is big

• minimum specifications

• lowest price

• domestic supplier preference

• buyer is unlikely to understand technicalities

• time taking

• patience